While the American Taxpayer Relief Act of 2012 (ATRA) finally ended more than a decade of "temporary" Alternative Minimum Tax (AMT) patches and fixes that kept expiring and had to be renewed, the ultimate resolution of ATRA was not permanent repeal of the AMT. Instead, ATRA provided permanent "relief" by merely locking in the latest AMT exemptions from 2011, and adjusting the exemption - and everything else under the AMT system - for inflation going forward.
As a result, high-income individuals continue to be potentially exposed to the AMT, depending on exactly what their income levels may be, and the AMT adjustments and preference items that have to be added back to income for AMT purposes. Fortunately, though, a client's AMT exposure can actually be quickly evaluated by looking at a chart that maps income after deductions, and the amount of deductions that are lost for AMT purposes, to figure out what combinations of income and lost deductions will result in an AMT liability.
Notably, though, being exposed to the AMT is not always a "bad" outcome. In fact, because the top AMT tax rate is "only" 28%, in some cases high income individuals will actually want to accelerate more income into an AMT year. In an AMT environment, the primary planning opportunity is actually to manage income around the AMT "bump zone" - that span of income where the AMT exemption is phased out, temporarily boosting AMT rates (and capital gains rates!) by an extra 7%. For those below the AMT bump zone, the goal is to spread out income to stay below the zone. But for those above the AMT bump zone, it turns out the best strategy to reduce the long-term bite of the AMT may actually be to pay even more in taxes!